And more specifically health insurance? Was it a free market invention?
I remember reading that Lodges used to provide health insurance through membership.
There is no such thing as government insurance. Government insurance is euphemism for government welfare.
Insurance is a market phenomenon. It involves people voluntarily pooling their money to spread out risk. It works for car insurance, home insurance, life insurance and any other kind of insurance one can think of. Health insurance is no different. It is nigh impossible for the average person to save money to pay for, say, a major surgery, especially early in their working life.
My brother had his colon removed in his mid 20s. It cost tens of thousands of dollars. There would be no way for him to pay for that out of pocket. The alternative would be to save an incredible amount of money or to take out a crippling loan.
So, yes, insurance is a market invention. However, it is so regulated that it's not surprise it's very function could be questioned.
Yes, I think it was originally offered as guarantees on shipped goods and things like that when it took weeks to ship things from one place to another and there was always a risk perishables would either be spoiled by the time they got there or not get there at all. You should read Against the Gods the Remarkable Story of Risk by Peter Bernstein. He explains everything in that book.
Mtn Dew: Insurance is a market phenomenon. It involves people voluntarily pooling their money to spread out risk. It works for car insurance, home insurance, life insurance and any other kind of insurance one can think of. Health insurance is no different. It is nigh impossible for the average person to save money to pay for, say, a major surgery, especially early in their working life. My brother had his colon removed in his mid 20s. It cost tens of thousands of dollars. There would be no way for him to pay for that out of pocket. The alternative would be to save an incredible amount of money or to take out a crippling loan. So, yes, insurance is a market invention. However, it is so regulated that it's not surprise it's very function could be questioned.
was the cost tens of thousands of dollars because HMOs drove up the cost in the first place?
before health insurance, was it really impossible to pay for major surgery?
how' d they make any money if noone could afford them?
limitgov: was the cost tens of thousands of dollars because HMOs drove up the cost in the first place? before health insurance, was it really impossible to pay for major surgery? how' d they make any money if noone could afford them?
All good points. However, with increased medical technology a major surgery like removing someone's intestine would still cost a great deal.
Are you suggesting there should be no insurance whatsoever?
I'm just pointing out that medical insurance would exist in a free market because, while overall costs would be much lower, there are still a myriad of procedures one could not save and prepare for.
Low premium, high deductible, catastrophic insurance. That's what you would see in a free market.
DD5: Low premium, high deductible, catastrophic insurance. That's what you would see in a free market.
Exactly. No mandates, no 3rd party payments for every little thing, no entry restrictions forced by the state, no FDA, etc. But, like home insurance, it's hard to save up for the unforseen, hence there is insurance.
Insurance is just a hedge against unforeseen circumstances. Unless humans suddenly become able to accurately see and predict the future, there will still be insurance as a means of reducing the likelihood of being wiped out by the unpredictability of life.
Mtn Dew: limitgov: was the cost tens of thousands of dollars because HMOs drove up the cost in the first place? before health insurance, was it really impossible to pay for major surgery? how' d they make any money if noone could afford them? All good points. However, with increased medical technology a major surgery like removing someone's intestine would still cost a great deal. Are you suggesting there should be no insurance whatsoever? I'm just pointing out that medical insurance would exist in a free market because, while overall costs would be much lower, there are still a myriad of procedures one could not save and prepare for.
The answer is, I don't know...
I don't know how much government intervened HMO's have driven up the cost....
maybe in a real free market, major surgery would be affordable....I don't know....
if there was no insurance, then perhaps it would be affordable...otherwise, how would surgeons who do major surgeries all day make a living? Unless they were willing to work for a price that the market demanded?